CRM system implementation always is a choice, and sometimes a very difficult one. Although the software solution itself is only a technical component of the overall concept of CRM, its impact sometimes determines the overall success or failure. Expensive, inflexible, inconvenient CRM can cause a decrease in motivation and freeze of the project for its implementation. Therefore, the choice of software should be approached very deliberate.
Consultants of Cicoresky Consulting have extensive experience of projects on CRM implementation and have prepared a series of publications on how to approach the correct choice of CRM-system, avoiding a lot of pitfalls waiting along the way. The series consists of three articles:
Classification of CRM
The world CRM market
CRM Selection Criteria
Part 1 - Classification of CRM
So, how can we actually classify and compare software solutions present on the market? We will offer four dimensions:
Traditionally, CRM-suite includes functionality supporting three business activities: sales, marketing and customer service.
The sales module usually includes lead management (management of relations with potential customers) and price offers management.
The marketing module allows you to accumulate and aggregate information on potential customers through various means of communication (e-mail, telephone, direct mail advertising).
The customer service module consists of the issue management and knowledge base.
In addition to the above mentioned main functionality, there is also an additional (special) functionality that allows you to manage marketing campaigns, call centers, etc., but the core functionality still requires the existence of the three above.
The main value of CRM is that all information is available in different departments simultaneously, thus ensuring the formation of a holistic profile of the potential / real client.
Sometimes vendors focus on the development of several modules, while the rest remains at the initial levels of maturity. Therefore, it is worth paying attention to the functional specialization of the vendor when making a choice of CRM.
(More details about the functionality of CRM will be delivered in the following publications Cicoresky Consulting.)
There are many ways how technically you can deploy CRM at the enterprise level. All of them are very different in costs, risks and potential benefits. We will focus on three basic options:
On-Premises model assumes that the enterprise installs the software product on its own server hardware. This approach gives maximum control. IT-service of the enterprise itself determines the plan for information protection and backup. A significant advantage of this model is a simpler integration with existing IT systems. The disadvantage is the high costs for server hardware and IT staff.
Application Hosting and Server Colocation. In this model, an enterprise buys software, and then installs and uses it on the server equipment of an external provider. Software licenses can be "perpetual" or on a subscription basis. In the case of hosting, a provider provides support, backup and recovery of data. This approach allows you to save IT costs, but provides fewer control options.
Software as a Service (SaaS) is a model first proposed by Salesforce.com and is primarily related to the development of cloud computing as an alternative way to manage the IT infrastructure of the business. This model tends to transform business software from a capital asset into a "utility service" (a regularly purchased and consumed "as per meter"). The enterprise pays for the software as a service on a monthly basis for a unit of use or for the number of users. The software is available over the Internet, while the business does not have any control over the IT infrastructure. The service provider clearly indicates the percentage of working time when the software is available (“uptime”).
SaaS-approach, on the one hand, allows you to get rid of the headache about the organization of its own IT service, but on the other hand, data security becomes compromised (client data is "in the cloud"). Concerning the cost, it should be said that in the long run the SaaS model can be more expensive than the local deployment.
It is worth noting that there are other important points that need to be taken into account. When having accumulated a long-term database of relationships with customers, moving to a new CRM can be very painful (read "expensive"). SaaS-provider can unexpectedly change the price policy - say, to leave a bad SaaS-supplier is comparable to an unsuccessful marriage - often a messy, contentious, and expensive experience.
Client application. This approach assumes that in order to access CRM, users installs a special application on the work station (PC). This model is gradually disappearing due to the widespread availability of access through the web browser and the use of access through mobile devices. The main advantage of this approach is the wider functionality of client applications than browser-based ones (despite the fact that the latter are developing very rapidly), as well as the ability to cache data that allows you to work offline.
Web application. To date, this is the dominant approach to the organization of CRM access. CRM access is provided via a securely configured web browser. The main advantages are access from anywhere in the world where there is Internet access. No additional software installation is required. Expanding and supporting the functionality of such a CRM is extremely simple, because nothing needs to be installed, updated or patched on the user's computer.
Mobile device access (mobile device access). With the growing popularity of mobile devices, such as smartphones and tablets, mobile access to CRM is also becoming more popular and in demand. Here it is very important to take notes, make appointments and use online calendars. Also, the functionality on the use of GPS-navigation is gaining popularity, especially for optimal routing of customer visits.
MS Outlook-integrated apps. Several CRM vendors offer add-ons for Outlook, because business users often spend a lot of time with this program. Such add-on helps to sort information flows from e-mails, calendar meetings, new customer profiles, etc.
There are many approaches to software licensing. The cost of a license implies what is licensed, for how long, for how many and with what user access. Below are examples of variations.
What is licensed: users, devices, connection ...
User licensing involves purchasing licenses for a specific user. Only these users can use the software, but they can log in into it from an unlimited number of devices. This is the most common form of licensing.
Some software is licensed for a separate device. This approach is typical, for example, in call centers where the same computer can be used by different employee shifts.
Concurrent licensing involves the simultaneous use by the organization of a limited number of licenses to connect to the server. This model is suitable if the software is not used constantly, and users periodically enter the system and exit it throughout the day.
For what time: perpetual license vs. subscription
Perpetual license is the most usual term of licensing. This approach remains the most common for software used on personal computers. In most cases, there is an additional fee for technical support, which also includes the right to use simultaneous versions of the software. If the user refuses technical support, then the next releases of the software must be paid.
The subscription license is similar to the "lease" model: an enterprise can use CRM only during the paid period. Typically, technical support and updates are included in the subscription fee.
Other licensing models ...
Nonemployee license. Many businesses have a need to provide access to their CRM for external users with limited access. For example:
Client portal integrated with CRM. Access to the CRM system allows customers to enter and directly view / enter / update data about themselves (e-mail, product preferences)
Partner portal integrated with CRM. Such a portal allows you to distribute leads through partner channels, and partners can update information on orders of marketing materials or registering new customers.
Read-only license. Within an organization, in addition to active users who enter transactions, there are a number of users who only need to view the CRM system information and there is no need to enter data. A simple example is top management, which needs to receive only summary information from CRM in the form of management reports. As a rule, vendors require a very small fee for such licence, or they are provided for free at all.
In the first part, we have reviewed possible approaches to distinguishing and classifying CRM products as the basis for understanding what is on the market and how to compare it all (and whether it is possible to compare at all). It is worth paying attention to the functionality, the ways of deployment, the levels of access to applications, as well as licensing.
Of course, in such an abundance of approaches to CRM you can get confused, even having a decent business experience. The Cicoresky Consulting specialists are engaged in helping clients find the right way to implement their own CRM concept.
In our next publication, we will make a brief overview of the global market for suppliers of CRM products. To be continued…